Govt. says ‘barber shop’ company awarded contracts since 2002

Jul 22, 2011 News

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…but records show entity registered seven years later

– Ministers refuse to look at evidence

The government yesterday sought to defend the ‘barber shop’ company that was awarded a whopping $300 million in contracts, but instead ended up raising more questions.
One question has to do with how contracts to the company, Digital Technology, were awarded in the past.
Minister of Education, Shaik Baksh, said that the first contract was issued a shocking seven years before the company was actually registered as a company.
On July 13, last, Digital Technology Group of Companies (as it was registered in Guyana on June 2, 2009) was awarded a contract valued at $223 million for the supply of 1,400 desktop computers to 70 schools across the country.
On Monday, last, the Education Ministry awarded a further $70 million to the same company to provide more computers, plus servers and overhead projectors.
But yesterday, Minister Baksh actually said that the $70 million contract was awarded before the $223 million contract.
In seeking to defend the company and the award of the two contracts valued $293 million, the Minister of Education, Shaik Baksh said Digital Technology not a fly-by-night company. He announced that the company was awarded 38 contracts – some small, some large – since 2002.
This would have meant that at the time of being granted the first contract, the head of the company Krishendat ‘Terrence’ Sukhu would have been 19 years old, and one of the current directors, Chandra Subrina Sukhu, would have been 17 years old.
However, according to documents seen by Kaieteur News, Digital Technology was formed on June 2, 2009.
Baksh, along with the Finance Minister Dr Ashni Singh, refused to see evidence of this when they were shown the documents by Kaieteur News reporters at a press conference called at the studios of the state-owned television, NCN.
The Minister also failed to defend the company’s breach of the Companies Act.
The Ministers, in vouching for the company’s reputation in the award of a separate multi-million contract last year, could not explain how at the same time Digital Technology was threatened by the Ministry of Legal Affairs with being struck off the Companies registry if it did not comply with the law.
On December 8, 2010, Digital Technology was written to by the Registrar of Joint Stock Companies, which falls under the Ministry of Legal Affairs, regarding its breach of the Companies Act.
The company was found to be in default of lodging with the Registrar of Joint Stock Companies a number of documents. These included Annual Returns, Balance Sheet, Profit and Loss Accounts and Auditor’s Report for 2010.
The company was given 28 days to submit the said documents or risk being struck off the register.
In that same year, 2010, the company was given a $37 million contract to supply computers and accessories to the Ministry of Finance. The Ministers could not explain how the company could have been awarded this contract when it was in breach of the Companies Act, and further refused to look at the documents which state this.
The two Ministers called the press conference to discredit yesterday’s headline story in the Kaieteur News regarding Digital Technology which was found to have as its head office address what is now a Brooklyn, New York barber shop (at 3154 Fulton Street).
However, when it came time to answer questions, the Ministers were stumped and left many questions unanswered.
In fact, Minister Baksh said that he was not concerned about the company’s New York Head Office, since he was dealing with the company that is registered in Guyana.
“We are not concerned about operations in the United States and Canada or Europe or any other country; it is registered and it is a recognized company in Guyana,” Baksh said.
“In these days, a procurer can operate with one computer and procure items. This idea of a building and a beautiful building to house a company does not hold for the supply of goods as such,” Baksh added.
But the Minister seemed to have been oblivious to the fact that the same locally registered company has said that the 1,400 computers it will supply under its $223 million contract would come from its American office.
That American office could not be found at the address the company provides on its website. Rather what is now there is “Antonio and Martin Barber Shop” on the lower flat and rented apartments above.
“We don’t go and look for a building and say well this building and this person do not have the capacity or the capability. The person will have to demonstrate that, and will have to ensure that funds are there, in terms of bid security, performance security and deliver the products,” Baksh stated.
In fact, the Minister suggested that no due diligence was done on the company before it was awarded the $223 million dollar contract, since a due diligence was conducted before the company was awarded a $70 million contract a mere two to three weeks prior.
This due diligence was not conducted by the Education Ministry. It was conducted by the Caribbean Development Bank preceding the award of the contract.
“You don’t go every stage and do back a due diligence. This was just two to three weeks ago. So you don’t go back now and carry out another due diligence,” Baksh stated.
But this is where Baksh contradicted both himself and the Minister of Finance, because both of them had minutes earlier said that in every new tender process the bidder is evaluated.
“Every tender is considered on its own merit,” Dr Singh stated. “Each contract is a fair system.”
Therefore, as the Minister himself stated, a due diligence was conducted on Digital Technology for the $70 million contract and not for the following $223 million contract, more than three times larger.
He said that the same procedures were not followed in what was two separate tendering processes.
This is also despite the fact that it was Baksh who said that “all” the process were followed and the same “transparent procedures and processes” were followed in the award of the two contracts to Digital Technology.
Baksh said that he was confident in the company because for both contracts the company had lodged the required 10 per cent performance security.
“The computers and accessories will have to be supplied to the Ministry before any payment is made and even in that case, all payments will not be made until the Ministry of Education is satisfied with the quality of the products. Then the remainder of the money will be paid,” Baksh stated.
But here again, the Minister seemed not to be in control of the facts regarding the contract. In an addendum to the bid documents for the supply of the computers to 110 schools, the contractor is told that he would have to deliver the computers to the schools in question and not to the Ministry of Education.
Each of the schools is slated to receive 20 desktop computers, a server, 11 UPS, 11 surge protectors, one printer and one projector. It is when the computers are delivered to schools that tests and inspections of items will have to be carried out.
Baksh said that both contracts have a three-year warranty, for which the 10 per cent performance security will be held to ensure compliance with the warranty arrangement.
He said that the computers will be sourced from Dell, while the printers will be of the reputable HP brand.
“Digital Technology, whether they operate at Grove or Kitty, is not a matter of concern for us.
“This is a supplier of computers; they will have to get the computers and deliver it to the Ministry of Education; we will assess the quality of the products by our technical personnel,” Baksh stated.
Baksh said the government was satisfied that Digital Technology is a recognized and registered company and has demonstrated its financial capability by way of lodging the performance security.
“This is not a shoe shop where you can have all kinds of quality and the problem of quality control; not a shoe shop.
“This is where a supplier has stated quite clearly that he intends to supply a quality product – a brand name product – and he will have to ensure the specifications are adhered to and the Ministry of Education’s technical personnel will ensure that this is done before payments are made.”
Yesterday, Kaieteur News reported that Digital Technology has been found to have as its head office what is now a Brooklyn, USA barber shop, in a case that bears a striking resemblance to Fip Motilall.
Motilall pocketed a US$15.4 contract to build access roads to the Amaila Falls Hydro Electric Project, but investigations by this newspaper revealed his US address to be but a sari and puja shop in Florida.
Now, investigations by this newspaper have unearthed facts about Digital Technology that could mirror the startling revelations about Motilall and his company.
Digital Technology in Guyana is listed as the Caribbean and Latin America Office of a company that goes by the name Digital Waves Technology Inc., which has as its Head Office this address: 3154 Fulton Street, Brooklyn, NY 11208.
Three months ago, checks by this newspaper revealed that this address housed a company called Assets Realty Inc. Today, the property has been remodeled and renamed “Antonio and Martin Barber Shop” as further checks revealed on Wednesday. Upstairs of the building serves as rented apartments.
For that Head Office address, the company lists its contact information as the mobile number: 347-410-9772. Calls to that number result in the voicemail: “Hello, you’ve reached Cliff David. Please leave a message after the tone and I’ll get back to you shortly. Thank you for calling.”
In Guyana, the company’s local address is 54 Grove Public Road, East Bank Demerara.
This address is part of a business complex at Grove, which did not have a single computer to sell recently when a Kaieteur News reporter researching bidders for the government’s One Laptop Per Family project visited.
The reporter was directed to the company’s office in Sandy Babb Street, Kitty, and the result was no different.

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